Question

A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows:

Price Quantity Demanded Quantity Demanded Quantity
by Members by Non-members Supplied
$10 1000 500 600
$15 800 400 600
$20 600 300 600
$25 400 200 600
$30 200 100 600

If only members are allowed to purchase tickets to this year's celebrity golf tournamen, then what wil be the equilibrium price?

Answer 1

Answer:

$20

Explanation:

Demand is the number of goods and services consumers are willing to consume at a given price over a given period of time. Supply is the number of goods and services that suppliers are willing to produce at a given price over a given period of time. The equilibrium price is the price at which the quantity supplied is equal to the quantity demanded. At this point, there is neither a shortage nor a surplus of the product. In this case, the point at which the quantity supplied of tickets is equal to the quantity demanded by members is at price $20 where both are at 600 tickets. Hence, this is the equilibrium price.

At any price lower than this, quantity demanded exceeds quantity supplied, causing a shortage. At any price higher than this, quantity supplied exceeds quantity demanded, causing a surplus.